Refunding bonds

The trend toward paying down debt, as opposed to tender offers or refundings, to save money cuts across Red state/Blue state lines. New Jersey retired $500 million of debt to produce $160 million of savings.

The state of Wisconsin is embarking on a flurry of debt-related activity as the year begins, with a cash defeasance and three refunding deals on the table.

Lansing's Board of Water and Light is issuing $350 million of tax-exempt bonds in a deal that would fund a tender offer for $232.6 million of outstanding debt.

Participants are mixed on whether there will be continued growth in 2024, but some still see a universe of taxable bonds that still can be tendered.

The municipal bond rally has brought two big Illinois issuers into the market with plans to sell refunding bonds this week.

With a high of $450 billion and a low of $330 billion, no firms currently see issuance surpassing the records hit in 2020 and 2021.

November's total volume rose 7.8% to $28.464 billion in 652 issues. For volume to top total 2022 issuance, December would need to see $44.329 billion of issuance.

The IRS concluded the examination of an advance refunding of capital improvement funds with no change to the bonds' tax-exempt status.

Washington will auction $483 million in two tranches on Tuesday.

The deal has new-money and refunding components and is expected to hit the market in a negotiated sale the week of Nov. 13.

October's total volume rose 29.3% to $37.156 billion in 661 issues from $28.738 billion in 614 issues a year earlier. New-money grew more than 30% while refundings were up by nearly 75%.

The rating agency cited ongoing positive financial and enplanement trends at the airport, which is planning a refunding.

The upgrades brought the Orange County Transportation Authority managed lanes toll credit to double-A levels across the board.

Total volume for the month was $26.062 billion in 677 issues, down from $36.583 billion in 928 issues a year earlier, according to Refinitiv data.

Total volume for the month was $30.599 billion in 577 issues, down from $40.423 billion in 900 issues a year earlier. Total issuance year-to-date is at $107.626 billion, falling 25.2% from the same period of 2022.

The Investing in Our Communities Act, introduced by House members Kustoff, R-Tenn., and Ruppersberger, D-Md., would reinstate tax-exempt advance refunding.

The collapse of Silicon Valley Bank and Signature Bank won't impact the Fed or the market enough to cause rates to drop and refunding volume to significantly increase, according to muni experts.

"We urge you to use rescue plan money to make your community safer," Biden said. "Invest in affordable housing, get small businesses back on their feet, train your workforce." 

Muni issuers are staunchly opposed to what they characterize as an unfunded mandate that provides limited benefits.

Rep. Jason Smith sold colleagues on his intentions to strictly oversee the Biden administration.